Weird-o-nomics [Updates]

The Atlantic has a long story “The Wonderful, Weird Economy of Burning Man”. They highlight the annual event’s impact on the surrounding area.

In recent years, the airport has taken to displaying Burning Man-style art and offering a welcome table to festival attendees. Once, the airport held a celebratory parade throughout the terminals, complete with small art cars and performers.

“Every single seat we have coming into this airport the weekend before will be filled and every single seat we have leaving on the departure weekend will be filled,” Kulpin says. He estimates that the airport reaps $10 million a year from Burning Man-bound flyers.

…Similarly lively scenes unfold elsewhere in Reno, and everywhere along the route to Burning Man’s ephemeral “Black Rock City”: lines of filled-to-the-brim cars tangle around gas stations, grocery stores are emptied of their bottled water, and parking lot marketplaces pop up to hawk duct tape, hats, and other gear in high demand.

These pit stops, hotel stays and last-minute purchases equal $35 million spent by Burning Man participants—“Burners,” for the uninitiated—in Nevada each year. Sixty-six percent of respondents in the 2013 Burning Man census (yes, it has a census) reported spending more than $250 in the state on their way to and from the event. Eighteen percent spent more than $1,000…“This event has a huge, month-long, positive impact on our local economy,” says John Slaughter, county manager for Washoe, which includes everything from Reno to the closest towns to the event, the 200-person-each desert settlements of Gerlach and Empire. “Our stores, restaurants, gas stations, and car washes see an incredible influx of traffic, providing a great boost to the Northern Nevada economy.”

Larry Harvey, CPO (Chief Philosophy Officer) says:

Burning Man is like a big family picnic. Would you sell things to one another at a family picnic? No, you’d share things…

The curious fact that a lot of money goes into creating a week that is free of money is not lost on Harvey. But those who peg this as a contradiction, he says, misunderstand the intent of the experiment.

“People get confused sometimes,” says Harvey, who unleashed Burning Man on the world with a foretelling bonfire at San Francisco’s Baker Beach in 1986. “They say that because we have a principle of decommodification, that we’re against money. But no, it’s not really about money. It would be absurd if we said we repudiated money. In order to assemble a city, we have to use market economics.” 

So, what IS the intent of the experiment? To learn more about market economics? Or to use market economics, like crowd-sourcing, and peoples’ innate desire to contribute to their community, in order to redistribute money from the Burners to the owners?

“People give because they identify with Burning Man, with our city, with our civic life,” he says. “The idea of giving something to the citizens of Black Rock City has enormous appeal to them because it enhances their sense of who they are, and magnifies their sense of being. That’s a spiritual reward.”

He says gifting—defined as the act of giving without the expectation of anything in return—alters the notion of value.  

“What counts is the connection, not the commodity,” Harvey says.

If it’s an experiment in giving, you’d think after 30 years BMOrg would have learned to be better at giving. In fact the new Burning Man Project appears to be worse at that (6% giving), than their previously very disappointing Black Rock Arts Foundation (25% giving).

If spiritual reward is the intent of the experiment, then why have the ticketing system? Why not just sell tickets, and make participation the spiritual reward? Making people wait in STEP for months, then at the last minute deciding to sell thousands of tickets in a lottery instead of to the queue, is not nurturing to peoples’ spirits.

Is it an experiment in morality?

painting by Todd Berman

As Burning Man culture and ethos seep out into what the community refers to as the “default world,” can a gifting economy survive the transfer?

“The term ‘gift economy’ is and isn’t an oxymoron. Certainly, the world couldn’t be run through a gift economy,” Harvey says.

“It doesn’t actually generate wealth, the vast majority of which comes from outside Burning Man in the form of campers, tents, generators, and loin cloths,” he writes.

“Nobody makes it to and from Burning Man without either a day job or the [labors] of people who have day jobs,” he goes on. “We’re nowhere close to describing, exhibiting, or participating in an ‘economy’ that truly relies on gifting. … What we do have is a compelling gift ‘culture’—and it matters.”

It matters, says Harvey, because it has potential to provide a meaningful counterpoint to the “default world’s” system.

“That spirit, if spread in the world and widely adopted, would condition how people, as consumers in the marketplace, behave,” Harvey says. “Whereas if all of your self worth and esteem is invested in how much you consume, how many likes you get, or other quantifiable measures, the desire to simply possess things trumps our ability or capability to make moral connections with people around us. There should be room in the world for both systems to flourish. If they did, they would inform one another.”

Perhaps someone should inform the Nevada authorities who think Burning Man is not a suitable event for children, that actually this is a moral experiment. We’re making room in the world for more authentic moral connections: with nudity, drugs, polyamory, and dubstep. We give more to art, than your local church gives to the needy. Therefore our experiment proves the superior morality of our shirt-cockers and Critical Tits.

The Atlantic featured the Generator in Reno, which is funded to the tune of $330,000 a year – we understand, almost entirely by a wealthy private donor.

Crowdsourcing effectively removes the power from large money groups to decide what gets made and what doesn’t,” says Matt Schultz, the artist behind several behemoth Burning Man pieces, of the crowd-funding phenomenon. “It enables the power of individuals to decide. It allows us to find the resources we need to make something amazing. It democratizes the act of production.”

Schultz and his team, the Pier Group, first made waves at Burning Man with a 300-foot-long wooden pier-to-nowhere in 2011 that cost $12,500 to build. They returned with the pier in 2012—this time with a life-size, $64,000 Spanish galleon sinking at the end of it. They outdid themselves once again this year, both in size, scope, budget and fundraising abilities: The group’s 72-foot-tall wooden sculpture, called Embrace, has been, perhaps, the most buzzed-about piece in the lead-up to this year’s festival. Picture two entwined figures proportional to the Statue of Liberty bursting, mid-waist from the ground.

The sculpture, which took shape in a Sparks, Nevada, warehouse with the help of around 200 volunteers, had a budget of $210,000. Its 140,000 pounds of wood, alone, required more than $70,000, says Schultz.

…The hope at The Generator is, Schultz says, at “to refine the economic principles of what a gift economy is and what a decommodified, year-round space is.”

There are various challenges with this. Everything is easier when there’s an expiration date, for example.  

“At Burning Man, your social interactions are for a week and you go home and reset,” he says. “There aren’t as many social repercussions. If you make your camp neighbor mad, they are only mad for a week. That’s been a challenge in bringing the principles to the real world.”

Unattainable as a true gifting economy might be, Schultz, like Harvey, believes it’s a custom worth incorporating into existing practices.

“We’re trying to find a way to make capitalism more equitable,” Schultz says. “Instead of saying one system is bad, or another is bad, we’re finding ways to make it function for more people.”

Burning Man’s economic system makes capitalism function for more people. Umm, how, exactly? By burning statues in the desert? By sending threatening legal letters to anyone trying to make money off the Burner ecosystem? By telling people who spend their own money on art cars, that their vehicle is now a “public conveyance” and they must drive randoms around or they risk being deported? By putting all the rights to monetize photos and videos in the hands of a small, secretive private company, that shares not a single cent with the artists?

There must be something I am missing about this “new” economy. Either that or the artists involved are missing the point: they exist purely on the largesse of people so wealthy that they can just give their money away for the sake of week-long temporary art. Even if the extent of your giving for the entire week was only $20, that’s more than 99% of society are handing out to people sleeping in the streets or giving to wildlife habitat preservation. The cause you are supporting with a gift at Burning Man is decadence and self-indulgence, not alleviating the suffering of others.

Larry reveals some of their “plan for a century” thinking:

“Right now we’re thinking we could go to 100,000 if logistics pan out”, Harvey says. “When people say ‘What if we get too big?’ I ask them, ‘[Too big] for what?’ They are worried we’ll become inauthentic. Because in their experience, when something gets bigger and bigger and bigger, it is alienated from its audience. But that’s if it’s just an item for consumption. They’re afraid it will be denatured by size. But it’s not about size. It’s not a quantitative problem. It’s a qualitative question.”

“I hope that I can leave this world knowing that the event in the desert isn’t the lynchpin and that, if it were removed, it would falter,” Harvey says. “My biggest fear is that [the event] would be the be all and end all. We are racing to make it otherwise. It is going to be Rome to the empire, as it were—the great capital city for some time to come. But we can already see [a life outside of it] in these larger regional events.”

It is through this dissemination that Burning Man’s economic principles could take root.

“We don’t think the world can be Woodstock,” he says. “Who’d think the world could be a perpetual carnival? But we do think that the world could rediscover values that used to be automatically produced by culture but aren’t anymore because culture is subject to the commodification in our world. Everything is sold back to us, targeted to demographics. What we have to do is make progress in the quality of connection between people, not the quantity of consumption.” 

That’s why BMOrg has to make the party bigger. To improve the quality of connection between the 40% Virgins their bizarre and convoluted ticketing system seems to throw up every year, and the 30% of their crowd who’ve been more than twice. Because everybody says “Burning Man sucked when it was smaller”.

Gift me your money, and I’ll tell you that you’re making the world a better place.

[Update: 8/18/14] The Reno-Gazette Journal has also done some number crunching on what Burning Man means to the local economy.

Last year, nearly 70,000 people traveled into Nevada for Burning Man. Throughout Reno and Fernley, burners could be found shopping in grocery and retail stores, frequenting restaurants and buying supplies before their weeklong stay in the Black Rock Desert.

According to the Burning Man organization, the annual event brings in tens of thousands of people and millions of dollars to Northern Nevada, with 52,000 people and an estimated $44 million in economic impact in 2012, and more than 68,000 people and an estimated $55 million in 2013.

The organization says it spends more than $5 million annually in Nevada on production and planning, law enforcement, emergency services, construction materials, toilets, labor and supplies, and on business trips throughout the year.

Burning Man also reports the organization donated more than $585,000 from ice sales to charities and organizations in Northern Nevada, including nearly $66,000 in 2012 to Pershing County charities, including Pershing General Hospital, Marzen House Museum, Lovelock Food Bank, Safe Haven Rescue Zoo and the Chamber of Commerce.

…Bonnenfant said the center has taken the Reno-Sparks Convention and Visitor Authority figures on visitors and their spending and estimated what Burning Man participants’ spending would average.

If the RSCVA estimates a visitor spends $85 per day in food and drink, he said he would estimate Burning Man participants are spending $50 a day based on the remote desert location of the event.

He said it is unknown how many Burning Man attendees stay at commercial lodging, or for how long, after the event.

It’s these gaps in the data that make it hard to calculate what that total impact is on the region, he said.

Bonnenfant reports that one slice of usable data within the 2011 Burning Man survey is that 21 percent of attendees arrived by airplane.

He said 21 percent of 2011’s population of 53,963 would equal 11,332 visitors to the area. Multiply that by an estimated $400 spent in food and drink, and that would equal $4.5 million in impact just for that slice of burners.

There are caveats to the estimated spending because not all participants stop in Nevada to buy food or lodging. And while many are buying gas within the state, most of the return to Nevada is via gas taxes which are applied to state roads and road construction and the rest of the profits would go to corporate owners.

…”Our community went from, ‘What is that going on in the desert?’ to embracing the concept of being the base camp of Burning Man — where people stop, shop, eat and play — and incorporating it as part of what we are,” Kazmierski said. “It’s a fundamental change as Burning Man has more and more of an influence on our community.”

Kazmierski said people are noticing a change in Reno when they visit. He has had executives tell him they are amazed at the differences in Reno’s culture and growth. The traffic that migrates through Reno during Burning Man gives business leaders a chance to see where Reno is heading and what the city has to offer.

…Fernley Mayor LeRoy Goodman said that throughout the years, Fernley has watched Burning Man grow from a few thousand to 60,000 people and with it a major economic spike in the community’s restaurants and stores two weeks before and after.

“It’s about a month that our community is benefiting economically,” he said. “My view is positive. They spend money here — Indian taco and water stands — I think people in the community look forward to it. The week after Labor Day, they look forward to seeing people. They stop in the same places, eat here and get cleaned up, and I think that’s neat.”

He said the influx of tens of thousands of burners through Reno and Fernley is not only good for the economy, it’s good exposure to what the region’s business and communities have to offer.

“When you’re coming from all over the world to Reno, you can take advantage of the eclectic businesses. Burner week is becoming like the Kentucky Derby and party for a few days in Reno — even if people aren’t going to Burning Man,” he said. “We are getting more and more traffic through here — spending the night in our hotels and shopping and participating in things — and it’s good for Fernley and all of Western Nevada.”

The details of the charity donation from the ice sales is an update from previous reports. If true, the $585,000 cash paid to Nevada charities is up substantially from $159,850 in 2010 which was split with many California based charities. It confirms our calculation that ice sales were above $1 million.